Pension Schemes Act 1993, Part X s33

PO-2378

PENSION SCHEMES ACT 1993, PART X DETERMINATION BY THE DEPUTY PENSIONS OMBUDSMAN

Applicant Mrs Denise Tapper Scheme Local Government Pension Scheme Respondent(s) Walsall Council, Wolverhampton City Council

Subject

Mrs Tapper’s complaint about her employer, Walsall Council, and the Pension Scheme’s administering authority, Wolverhampton City Council, is that they refused to award Tier 2 pension benefits from 1 April 2011.

The Deputy Pensions Ombudsman’s determination and short

reasons

The complaint should be partly upheld against Walsall Council because, although the decision as to which tier of benefits to award was made correctly, there was some delay in the process and failure to communicate with Mrs Tapper.

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DETAILED DETERMINATION

The Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 (the Regulations)

1. Regulation 20(1) sets out the eligibility conditions for ill-health early retirement benefits:

“If an employing authority determine, in the case of a member who satisfies one of the qualifying conditions in regulation 5-

(a) to terminate his employment on the grounds that his ill-health or infirmity of mind or body renders him permanently incapable of discharging efficiently the duties of his current employment; and

(b) that he has a reduced likelihood of being capable of undertaking any gainful employment before his normal retirement age,

they shall agree to his retirement pension coming into payment before his normal retirement age in accordance with this regulation in the circumstances set out in paragraph (2), (3) or (4).”

2. There are three tiers of benefit that may be paid; tier 1 - Regulation 20(2) - is the highest level and is paid where there is no reasonable prospect of any gainful employment before normal retirement age. Tier 2 - Regulation 20(3) - is paid where, although the employee cannot obtain gainful employment within three years, it is likely that they will be able to obtain some gainful employment before normal retirement age. Tier 3 - Regulation 20(4) - is the lowest level and is paid where it is likely that they will be able to obtain gainful employment within three years of leaving his employment.

3. Regulation 20(5) requires the employing authority to obtain a certificate from an independent registered medical practitioner for ill-health early retirement applications:

“Before making a determination under this regulation, an authority must obtain a certificate from an independent registered medical practitioner in occupational health medicine

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(“IRMP”) as to whether in his opinion the member is suffering from a condition that renders him permanently incapable of discharging efficiently the duties of the relevant employment because of ill-health or infirmity of mind or body and, if so, whether as a result of that condition he has a reduced likelihood of being capable of undertaking any gainful employment before reaching his normal retirement age.”

4. Regulation 20(14) defines the terms “gainful employment” and “permanently incapable”:

‘“gainful employment” means paid employment for not less than 30 hours in each week for a period of not less than 12 months.

“permanently incapable” means that the member will, more likely than not, be incapable until, at the earliest, his 65th birthday …”

5. Regulations 56 to 61 set out the process for issuing decisions and dealing with appeals, which include:

 the IRMP must certify that he has not previously advised, given an opinion on or otherwise been involved in the case;

 the employing authority must provide a written notice of its decision and refer to the right to challenge that decision, together with time limits for doing so (which is six months) and details of the person to whom that application is to be made (“the specified person”);

 where a decision on a disagreement has been made by the employing authority, the applicant may within a further six months make an application to the administering authority for a second stage decision.

6. The process for dealing with complaints is referred to as the Internal

Dispute Resolution Process (IDRP).

Material Facts

7. Mrs Tapper was employed as a social worker by Walsall Council. She became ill and after some time was given a diagnosis of cerebral

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vasculitis, a rare progressive condition with many characteristics of multiple sclerosis. In a report dated 7 June 2010 her treating consultant gave his opinion that he did not expect there to be any significant improvement in her condition in the long term. She worked reduced hours and Walsall Council made reasonable adjustments for her, including allowing her to do a considerable amount of work from home and providing equipment to support this, but in 2011 she ceased working. She says she did not wish to stop working and this was a reluctant decision made after many attempts to continue.

8. Walsall Council instructed an Independent Registered Medical Practitioner

(IRMP) - Dr Gandham - to assess her for ill health early retirement. Mrs Tapper’s union representative accompanied her when she was assessed by Dr Gandham. In his opinion (dated 14 July 2010) Dr Gandham certified that she was permanently incapable of performing her duties and had a reduced likelihood of obtaining other gainful employment, but likely to be able to undertake some other employment within three years. He therefore assessed her as entitled to tier 3 benefits. In a summary accompanying his certificate, Dr Gandham said

“I am not convinced that she would not be able to undertake any other work permanently… when she learns to cope better and motivates to take up alternative work she should be able to undertake physically and mentally less demanding roles…”

9. In a letter dated 27 October 2010 Walsall Council advised Mrs Tapper it had been informed by its occupational health physician that she had been assessed as unable to carry out her duties but likely to be able to obtain other gainful employment within three years. She was told she could request a sickness hearing to allow a council officer to make a decision about her continued employment, or if she did not object, an officer could make a decision to terminate her employment without the need for a hearing. She was granted a Tier 3 pension from 1 April 2011.

10. Mrs Tapper complained about the assessment, saying Dr Gandham had ignored a letter from her consultant, and ignored her answers to his questions, which all indicated she would not be able to work again; had

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failed to examine her; and had spent most of the appointment complaining that the unions had caused the pension funds to incur costs due to ill health retirement arrangements.

11. Walsall Council wrote to her on 6 May 2011 saying it had asked Dr Gandham to review whether there were any flaws in the decision-making process or whether any evidence was flawed or not considered properly. He had confirmed that he reviewed the file but stood by his judgment to award tier 3 and so Walsall Council decided to uphold his decision in this respect. She was advised she could proceed to stage 2 of the IDRP within 6 months.

12. Mrs Tapper wrote on 2 June 2011 confirming that she wished to appeal; she said she should be entitled to at least tier 2 benefits. She gave further details of her medical condition and of her concerns about Dr Gandham's assessment. She also complained that he had made an error in failing to say her reduced working prior to retirement was due to her ill health condition, and until this was rectified she was concerned this period of work would be ignored for the purposes of calculating her pension entitlement.

13. She then wrote to Wolverhampton Council (the Pension Fund’s administering authority) saying her original complaint had been a grievance about Dr Gandham, not an appeal against the pension decision, but she now wished to appeal against the pension decision. She asked how she should proceed. Wolverhampton Council advised that her letter of 2 June 2011would be dealt with by Walsall Council as a stage 1 appeal.

14. Walsall Council asked a different IRMP - Dr Poole - to examine Mrs Tapper. She was again accompanied by her union representative. Dr Poole said her diagnosis was not certain; it might be Multiple Sclerosis. Dr Poole considered letters and reports form 10 doctors, including the consultant who had said he did not expect to see any long term improvement. Dr Poole said she had a working diagnosis of either cerebral vasculitis or multiple sclerosis, but the cause for the former had not been identified and the latter had not been proven.

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15. He concluded that it was difficult to say whether Mrs Tapper was incapable of undertaking any work until age 65, as required for tier 1 benefits, or for three years as required for tier 2. He said the comment from her consultant that she would not be able to work was based on Mrs Tapper's comments and the results of an MRI scan rather than objective evidence of relevant weakness, lack of co-ordination or fatigue. Dr Poole concluded that she was unlikely to be able to work as a social worker. He agreed that he would have certified her for tier 3 benefits. If her condition worsened she could reapply from deferred status. Alternatively, she would be reassessed after 18 months and might then move to tier 2.

16. Mrs Tapper was seen by Dr Poole in Sept 2011 but his report was not sent to Walsall Council until November and was not considered until 5 January 2012. It was looked at by Walsall Council's in-house physician who agreed with Dr Poole's opinion that tier 3 was appropriate. She was advised she could appeal to stage 2.

17. She did appeal and the stage 2 decision was issued by Wolverhampton Council on 8 May 2012. This decision referred to Dr Poole's report; he had said it was

"…very difficult to give a secure workability prognosis. This would not normally be a significant issue to someone near to normal retirement age but clearly is an issue for assessing workability potential over the next 20 years."

18. He had agreed she wouldn't be able to undertake gainful employment in the 'foreseeable future', which meant two - three years. That was short of permanency over 20 years. On the basis of this, Wolverhampton Council's physician said the doctors' opinions were evidence-based and not perverse and there was no compelling evidence to contradict them. The decision was for the employer, but great weight would be given to the medical opinions provided they were obtained properly. The stage 2 decision confirmed the earlier decisions.

19. The Fund wrote to Walsall Council in September 2012 advising that an 18 month review was due. In March 2013 Walsall Council said there was ongoing correspondence with the consultant about this.

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20. The matter was referred to another IRMP to consider. In a certificate dated 10 May 2013, he certified that Mrs Tapper was not likely to be capable of gainful employment within three years. On 31 May 2013 Walsall Council confirmed her pension was increased to Tier 2 with effect from 1 October 2012.

Summary of Mrs Tapper’s position

21. Mrs Tapper considers she should have received tier 2 benefits from the outset and the decision to increase from tier 3 to tier 2 from October 2012 was an arbitrary one, given that her condition had not changed since the original award in April 2011.

22. Her own consultant had treated her on many occasions and was best placed to determine the likely prognosis of her condition. He has consistently said she is not likely to work again in any capacity but his opinion was ignored. Decisions were made by people who barely knew her and with little credence given to information she provided.

23. The original assessment by Dr Gandham was contradictory – he certified that she had a reduced likelihood of being able to obtain other gainful employment, but went on to say it was likely she was capable of obtaining other employment within three years. The award was based on this clear contradiction. His assessment was little more than a farce, since his emphasis was entirely on funding issues and he did not even bother to examine her; the flaws in his assessment led her to question his competence. This flawed assessment set the scene for everything that followed. He was then asked to review his opinion which is tantamount to a convicted person being asked to adjudicate on their own appeal.

24. The assessment by Dr Poole was an improvement, in that he did examine her, but much of his assessment was taken up with questioning the diagnosis. She doubts that he saw reports from 10 different doctors, since she had not been seen by that many. He also referred to tier 1 benefits, but she has never aspired to that and thinks tier 2 would always have been appropriate in her case.

25. She has made attempts to work part-time in a largely sedentary job but these attempts were unsuccessful. In view of her condition it is unlikely

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any employer would take her on – she had been absent from work for over two years due to ill health and during the three years prior to that had only worked a total of around six months. She could not maintain work even of the most sedentary nature without regular ill health absences.

26. If this record of ill health absences has been taken into account, she would have qualified for a tier 2 award immediately.

27. The whole process was dragged out over a long period. Having to justify her symptoms and being disbelieved caused her a huge amount of distress. She has lost a fulfilling career and suffered a financial loss too.

Summary of Walsall Council’s position

28. Walsall Council accepts that it did not deal with the case as well as it could have - there were delays at various stages and her complaint was not dealt with promptly. In particular –

 her initial concerns were dealt with as an appeal against the decision rather than a complaint about the way Dr Gandham dealt with her;

 there was a delay dealing with the 18 month review;

 during both the retirement process and the IDRP it took the Council a long time to respond and communication with Mrs Tapper was not as good as it should have been

29. The Council has agreed to some compensation for this, but says on legal advice it could not award compensation itself. It does not accept that the decision itself (to award Tier 3) was wrong.

30. Despite the issues highlighted above, Walsall Council considers the decision to award tier 3 benefits was made correctly on the basis of medical evidence that she only met the criteria for tier 3.

Summary of Wolverhampton City Council’s position

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31. Wolverhampton City Council also says the decision was made following appropriate medical opinions. The decision was for her employer, Walsall Council, to make. This was done correctly after obtaining a certificate from an IRMP.

32. Following Mrs Tapper’s appeal, the matter was reviewed by a second IRMP, who supported the award of tier 3 benefits and a stage 2 of the IDRP an opinion was sought from a further IRMP who again confirmed the same advice.

33. A review was due in October 2012. Although this process was not competed until May 2013, the decision to increase her benefits to tier 2 was backdated to October 2012.

Conclusions

34. In order to qualify for an ill-health early retirement pension, Mrs Tapper must satisfy the eligibility requirements for it as set out in the Regulations. These are that:

 her employment is terminated on the grounds that her ill health leaves her permanently incapable of discharging efficiently the duties of her local authority employment; and

 she has a reduced likelihood of being capable of undertaking gainful employment (i.e. of at least 30 hours per week) before her normal retirement age;

35. If those criteria are satisfied, the employee is entitled to an ill health pension, and the employing authority must then go on to consider which of the three tiers of benefit should be paid. The lowest level - tier 3 - will be paid where it is likely that the employee will be capable of undertaking gainful employment within three years of leaving service (or before normal retirement age, if earlier).

36. My role is not to consider whether or not Mrs Tapper actually fulfils the appropriate requirements; that was a decision for Walsall Council to make. I have to decide whether the decision was made properly. In order to do that, I will consider whether Walsall Council applied the law correctly, took

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into account all relevant information (and nothing that was irrelevant) and made a decision that was not perverse.

37. Walsall Council complied with its obligations as set out above; it obtained an appropriate medical certificate, and considered the test set out in the Regulation – firstly, whether Mrs Tapper was permanently incapable of performing her duties and then which of the three tiers of benefit was appropriate.

38. I am satisfied that Walsall Council applied the Regulations properly when making its decision. Dr Gandham’s view was that Mrs Tapper was incapable of carrying out her own occupation but was likely to be able to carry out some other gainful employment within three years. Walsall Council took account of that in reaching the decision.

39. Wolverhampton City Council’s only role was at the second stage of the IDRP. It did not find in her favour, a decision which in my view was reached correctly and was also based on medical advice. Mrs Tapper says the opinion from her own consultant was ignored. That was not the case, however. The consultant’s views were taken into account but Walsall Council decided to prefer the opinion set out in the IRMP’s certificate. During the various reviews, opinions were obtained from further IRMPs. It is clear that the consultant’s comments were considered; Dr Poole saw correspondence not just from her consultant but from 10 doctors, but again came to a different view from her consultant. Mrs Tapper questions whether he saw that many reports, but he gave details of these in his report so I have no reason to doubt that. Mrs Tapper also says her consultant was better informed about her condition. That may have been so, but he was not qualified in occupational health. Where different opinions are expressed by different doctors, the decision-maker is entitled to prefer one opinion over another.

40. Mrs Tapper says that her condition has not changed and so, if she was entitled to tier 2 benefits from October 2012, she should equally have been entitled to them in April 2011. I can understand why she should take that view. However, the IRMPs could never be certain how her condition would develop. They could only express a view, on the evidence before them at the time. The correct test was whether, at that point, it was more likely

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than not that she would be able to obtain some gainful employment within three years. Dr Gandham’s view on that was clear – he said she should be able to undertake physically and mentally less demanding roles; in other words, it was his opinion at the time that it was likely she would be able to carry out other work. The fact that it subsequently turns out that someone is not able to carry out other work does not undermine the opinion given.

41. She also says the IRMP’s opinion was contradictory, since he said she had a reduced likelihood of being able to gain other employment, but she was capable of obtaining other employment within three years. Those were, however, two of the questions he had to answer, and dealt with different issues. The first establishes whether she is entitled to an ill health pension in accordance with Regulation 20(1). Having dealt with that, the IRMP must then go on to consider which of the tiers applies, under Regulation 20(2), (3) or (4). Having a reduced likelihood of obtaining employment is not the same as having no likelihood at all.

42. There is one other point I wish to comment on. Before making its decision, Walsall Council referred the matter to its own in-house occupational health physician. The requirement under the Regulations is to obtain an opinion from an independent doctor and the aim of this to ensure there is an independent view. It made no difference in this case, since he came to the same view as the IRMP. But if Walsall Council insists in all cases that its own occupational health doctor gives a view on the IRMP’s opinion, and if the Council were always to follow the in house doctor’s opinion, it would in effect by allowing an in-house doctor to have a veto over any opinion from the IRMP. I would be concerned about this since it would undermine the whole purpose of obtaining an independent opinion.

43. I do not uphold Mrs Tapper’s complaint that she should have been granted tier 2 benefits from the outset. However, it is clear that there was delay at various stages and the way the process was managed caused Mrs Tapper considerable distress. Walsall Council has commendably accepted responsibility for this and indicated a willingness to pay some compensation for the distress caused to Mrs Tapper, but says it cannot make a payment without a direction from the Ombudsman.

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44. I think it is unnecessarily bureaucratic for Walsall Council to say it cannot take action to remedy the maladministration it has identified. If it has accepted it was at fault, there can be no objection to settling the complaint before it had to come to me in much the same way as a claim in law might be settled in advance of Court action. However, as that has not happened, I will make a direction for a payment to be made.

Directions

45. Unless already paid, Walsall Council shall within 28 days make a payment of £300 to Mrs Tapper to reflect the distress caused to her by the delays and poor communication identified above.

Jane Irvine Deputy Pensions Ombudsman

27 March 2014